On July 10, the Federal Communications Commission (“FCC”) released the text of a Declaratory Ruling and Order, initially adopted on June 18, that provides various clarifications regarding the Telephone Consumer Protection Act of 1991 (“TCPA”) and the FCC’s existing rules. The proceeding that led to the Order attracted widespread attention and was the result of nearly two dozen petitions filed by organizations representing healthcare, banking, retail, and telecommunications interests. The broad interest in this proceeding is the direct result of the sweeping impact that the TCPA has had on when and how businesses may contact consumers, as well as the multiplicity of consumer class actions threatened and filed against advertisers, debt collectors, and others making automated calls or sending automated text messages.
What is an “Automatic Telephone Dialing System” (ATDS)?
The first clarification made by the Order is with respect to “autodialers” (or, in the wording of the statute, an “automatic telephone dialing system”). The TCPA and the FCC’s existing rules prohibit making non-emergency calls to a wireless number without prior express consent when those calls are made using an autodialer or an artificial or prerecorded voice. Accordingly, there has been significant controversy over what kinds of dialing systems qualify as autodialers, which the TCPA defines as equipment that has the “capacity” to “store or produce telephone numbers to be called, using a random or sequential number generator,” and to “dial such numbers.” See, e.g., Satterfield v. Simon & Shuster, Inc., 569 F.3d 946, 951 (9th Cir. 2009) (A “system need not actually store, produce, or call randomly or sequentially generated telephone numbers, it need only have the capacity to do it” for the TCPA to apply.).[i]
In the Order, the FCC announced a very broad interpretation of “ATDS,” concluding that a dialing system has the requisite “capacity” so long as it has either the “current ability” to place autodialed calls or the “potential ability” to do so, even if only through the installation of new software or other modifications. While the Order carves out devices with only a “theoretical” capability to place autodialed calls, the FCC’s interpretation of “autodialer” appears to sweep in the vast majority of computer programs or stand-alone devices used by businesses to place calls to consumers without manual intervention. The Commission declined to “at this time address the exact contours of the “autodialer” definition or seek to determine comprehensively each type of equipment that falls within that definition that would be administrable industry-wide…. How the human intervention element applies to a particular piece of equipment is specific to each individual piece of equipment, based on how the equipment functions and depends on human intervention, and is therefore a case-by-case determination.”
Solicitation and Revocation of Individual Consent
The Order also contains various clarifications regarding how to establish consent and how such consent may later be revoked by an individual. The Order reaffirms that the “burden is on the caller to prove that it obtained the necessary prior express consent” before making a call or sending a text message. Callers cannot rely on the fact that a consumer’s wireless number is in the contact list on another consumer’s mobile phone to demonstrate consent to autodialed or prerecorded calls or text messages. The Order states that consumers may “revoke consent at any time and through any reasonable means.” The FCC makes clear that callers cannot “limit the manner” through which consumers can revoke their consent, meaning that callers must be able to meaningfully track and implement revocations ranging from a consumer’s real-time verbal request to formal written demands.
Calls to Re-assigned Wireless Numbers
Another hot topic addressed in the Order is the applicability of the TCPA to wireless phone numbers that have been reassigned. Unfortunately, business hopes for some sort of an explicit good faith safe harbor in this frustrating area of potential liability were not realized. Typically, after a phone number is returned to carrier—either because the consumer actively cancelled service or stopped payment for service—it is made available for reassignment within 90 days. A caller may have obtained valid, enforceable consent from the previous consumer with the wireless number, but may not have consent from the individual to whom the number has been reassigned. The Order clarifies that, after a number is reassigned, a caller may make only a single call to the new holder of the number, after which the caller is presumed to have either actual knowledge (through speaking with the recipient of the call) or “constructive” knowledge (through hearing a name on a voicemail greeting, hearing an out-of-service tone, or any other of “a number of ways”) that the number has been reassigned.
In practice, it may prove very difficult for callers to ascertain from a single call whether a number has been reassigned (especially if the called party does not answer), though the Order identifies various best practices that, while not operating as “safe harbors,” may offer ideas to businesses seeking to avoid inadvertent violations:
(1) use a third-party database to determine whether a number has been reassigned;
(2) use an “interactive opt-out mechanism” on all calls;
(3) allow customer service representatives to track wrong number reports;
(4) allow customer service representatives to record corrected phone numbers;
(5) “periodically” request updated contact information by mail or email;
(6) use technology or customer service representatives to recognize the “triple-tones” that identify and record disconnected numbers;
(7) establish policies to determine that a number has been reassigned if no contact has been made after a “period of attempting to contact a consumer”; and
(8) allow customers to update contact information by responding to any text message they receive.
The FCC’s Order also includes several additional clarifications, including rulings on the application of the TCPA to certain “pro-consumer” and “time-sensitive” financial and healthcare communications, as well as other rulings regarding communications by app developers and other senders of text messages. For example, helpfully, the Commission clarified that the law is not violated by the sort of consumer-initiated, one-time text response campaigns that are typical of many sweepstakes or other promotions. When the calling party texts back (one-time) to a consumer who responded to a displayed or published “call to action” the reply back is deemed a fulfillment of the consumer’s request to receive the text, rather than a telemarketing request.
The Order is a disappointment to many petitioners, and has already been challenged in the D.C. Circuit by ACA International (the Association of Credit and Collection Professionals). ACA filed its petition for review with the D.C. Circuit on July 10, and filed an amended petition on July 13. See ACA Int’l v. FCC, No. 15-1211 (D.C. Cir. filed July 10, 2015).
For a more complete analysis of the Order’s additional provisions, please visit the Latham & Watkins Client Alert discussing the Order.
[i] Latham & Watkins represented the defendant in this case.